The property market is expected to start its active recovery early next year, says Saul Geffen, chief executive of ooba, the home loan origination company formerly called MortgageSA.
Though the company's online survey reveals that 50 percent of South Africans feel that the property market will continue its downward trend until the end of this year, Geffen says there is light at the end of the tunnel.
"The property market has been hit hard by high interest rates and tightening of lending criteria," says Geffen. "South Africans have had to make changes to their lifestyles in order to keep up with bond repayments."
But, he says, there is hope on the horizon.
"The 1,5 percent cut in interest rates has provided relief to consumers and we expect further cuts," Geffen says.
The inflation rate is also expected to show a meaningful decline in the early part of this year, which will help the economy, Geffen adds.
However, the worrying trend is the banks' lending policies, which Geffen warns are set to continue to be stringent this year.
Banks currently require deposits of between 10 percent and 30 percent, which he says are not expected to be relaxed for most of this year.
"Anyone looking to buy property should apply for an ooba home loan pre-qualification certificate to determine how much they qualify for," advises Geffen.
Koos du Toit, chief executive of P3 Investment Group, a wealth creation company, says salary earners who qualify for a bond should look at opportunities in the buy-to-let market.
"Invest in residential property now. Bargains are available and rentals are holding up well," he says.
He says that with increasing pressure on property prices combined with a declining trend in interest rates, purchasers can pick up spectacular bargains, particularly on entry-level properties valued at under R500000.
He warns, however, that this situation is unlikely to last beyond 2009.
"At present, developers are desperate to sell units that were planned during the boom years and are now coming on stream.
"In a market that's wallowing in the doldrums with few buyers, developers are dropping prices to move their stock."
Though building costs continue to rise, Du Toit warns that once current stock has been sold, prices will rise again.
Du Toit believes that while the current scenario is good for first-time buyers, it's even better for investors in the entry-level buy-to-let market as the gap between purchase price and rental income is narrowing.